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What are Privacy Pools?
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Privacy Pools is a new type of blockchain privacy tool that aims to provide users with the ability to trade anonymously while ensuring the compliance of the source of funds. Unlike traditional currency mixing services such as Tornado Cash, Privacy Pools can prevent illegal funds from being mixed into the transaction pool while protecting user privacy through the design of Zero-Knowledge Proofs, ZKP and Association Set Provider.
The concept of Privacy Pools originated from a 2023 research paper co-authored by Vitalik Buterin, Jacob Illum, Matthias Nadler, Fabian Schär, and Ameen Soleimani.
The Privacy Pools architecture consists of a contract layer, a zero-knowledge layer, and a collection provider layer. The contract layer manages assets and states, the zero-knowledge layer ensures privacy, and the ASP layer provides compliance functions. Specifically, using zero-knowledge proofs allows users to prove that they belong to a group of approved depositors without revealing their complete transaction history.
The launch of Privacy Pools provides users with a tool that balances privacy and compliance, and is expected to drive more institutions and enterprises to adopt blockchain technology. By isolating illegal funds, Privacy Pools helps to reduce industry regulatory pressure and remove obstacles to industry development to a certain extent. In addition, other privacy protocols can integrate ASP mechanisms to enhance their own compliance and promote the standardization of privacy technology. Of course, ordinary users can also participate in on-chain activities in a safer and compliant manner, redefining the norm of blockchain privacy.
The Privacy Pools protocol was released by the 0xbow team.
0xbow is a startup project focusing on blockchain privacy and compliance infrastructure.
Investors in the project include Number Group, Vitalik, BanklessVC, Public Works and several angel investors.
After the launch of the Privacy Pools mainnet, Vitalik and Ethereum core developer Tim Beiko both deposited 1 ETH into the privacy pool to show their support.
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